Regulation Reboot for Short-Term Rentals in New Orleans

The sounds of a raucous pool party drift over a privacy fence amid brightly colored cottages that have become vacation rentals in New Orleans' Marigny neighborhood, and Allen Johnson laments the dwindling number of full-time neighbors.

"Suitcases are a sign of the times here," he says as two young men bearing 12-packs of beer exit a taxi and disappear behind an iron gate.

Short-term rentals facilitated by Airbnb, HomeAway and similar web-driven operations have been changing neighborhoods in New Orleans and other cities, generating headaches along with tourist dollars.

Critics in New Orleans say current regulations have allowed proliferation of "whole-home" short term rentals owned by investors - often from out of state - not residents. They complain of an exodus of full-time neighbors amid a lingering dearth of low-income housing and higher property tax assessments.

Also, the visitors often push the limits of city's heritage of all-night partying.

Battles over short-term rental regulations have been playing out at the municipal and state levels nationwide. In New York, Mayor Bill de Blasio signed a bill requiring Airbnb to reveal host's names and addresses so the city can fight illegal listings. Massachusetts legislators have been debating lodging taxes for short-term rentals. Proposed restrictions on vacation rentals may be put before voters soon in South Portland, Maine.

New Orleans seemed at the forefront of efforts to legalize and regulate vacation rentals in 2016. Airbnb negotiated elements of the regulations and hailed them as a model - a tool for rule enforcement and taxes and fee collection.

Now, the city is trying again, prodded by dissatisfied residents and associations, such as one headed by Johnson.

"We were sold a bill of goods - that it was going to be mom-and-pop," Council member Kristin Gisleson Palmer said, alluding to arguments that it would aid homeowners who want a little extra income.

Palmer won unanimous council approval for a city planning commission study of the issue and a nine-month moratorium on some rental licenses. New Orleans homeowners can still rent part of the house they live in to vacationers, but there are no new or renewed licenses for rentals of whole homes not occupied by the owner.

Airbnb soon removed a registration system from its website allowing short-term rental hosts to apply for a city license, saying it's not workable under the new changes. A HomeAway spokesman expressed worries that the city was moving toward banning or severely limiting whole-home rentals.

More recently, HomeAway released proposals for changes aimed at "compromise and collaboration." And Airbnb spokeswoman Laura Rillos issued a statement in mid-August saying her company is open to working with the city on issues including enforcement tools and neighborhood impacts.

Opinions on short-term rentals are as diverse as New Orleans itself.

Sitting at a kitchen table in one of his vacation rental houses, Alex Ramirez, the son of Central American immigrants, recounts buying the two-unit house in a blighted neighborhood, living in one side and renting the other out. As he invested in more real estate, he says, short-term rental revenue enabled him to purchase and renovate abandoned and blighted properties.

"Every one of the properties that I own, whether it's on the short-term rental market or the long-term rental market, I've brought back to commerce," says Ramirez, who said he owns eight short-term rental properties and manages several others.

Eric Bay, who manages vacation rentals, says they bolster tourism, create jobs and provide affordable lodging for families learning the history and culture of the 300-year-old city.

But some hospitality industry workers see a threat.

"At the end of my lease my landlord asked us to leave" casino worker and union member Dylan Seitel told the planning commission recently. He said his one-time home became a short-term rental.

Susan Beck, an artist and waitress living in half of a two-unit house, sees both sides: The owners of her unit give her a break on the rent for cleaning the other unit - a short-term rental. But noise from a two-story vacation rental across the street can be a nuisance.

"It's just an odd feeling when I get up in the morning and I come out my front door and there's a different group of six guys on the balcony every morning," she adds.

HomeAway's suggested regulation revamps include allowing property owners to rent out only two properties that they don't live in; limiting the number of licenses per block face; and an exemption to limits in blighted areas to encourage development.

"Everything's on the table," insists Palmer, who said in an interview that regulations may ultimately require large-scale owners of affordable rentals in commercial areas to provide long-term affordable housing.

She stressed that new regulations must address the density of vacation rentals that critics say have commercialized neighborhoods.

"When you live in a neighborhood, you have a quality of life, where you care about the trash, you look out for your neighbors," she said. "All that's being eroded, that whole sense of community."

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